M&A Deals Jumpstart IoT

By now, I assume that everyone is familiar with the promise of the Internet of Things (IoT). With the IoT in place, devices will be so interconnected that they will open communications between ourselves and our homes, appliances, cars, medical devices, and more. Billions of sensors will be in place to continuously monitor the various aspects of our lives. Between the required sensing technologies, data processing, communications support, and more, however, a lot has to be put into place to enable the IoT.

In “4 Major M2M and IoT Challenges You Need to Know,” for example, Technology Editor Jean-Jacques DeLisle provides an overview of some key concerns that need to be resolved and kept in mind: standards development and interoperability; trading off low power versus data rate; security; and interference and spectrum challenges. Due to all of the hype and interest around the IoT, many companies are looking to make big deals now in order to jumpstart their ability to overcome these challenges.

According to 451 Research, acquirers spent $14 billion to acquire more than 60 IoT-related companies in 2014. The firm notes that last year’s number translates into a fortyfold increase in acquirer spending and a more than twofold jump in the number of deals compared to 2013. They also involved a lot of major players, such as Google, Samsung, Cisco, Intel, PTC, and Qualcomm.

Drilling down, 451 Research revealed that last year’s M&A activity was almost evenly split between IoT-enabling horizontal infrastructure and vertical applications. About 20 acquisitions targeted the infrastructure arena. The impetus behind those deals was the aspects needed to make the IoT work effectively: a wide range of sensors, semiconductors, software platforms, security infrastructure, and connectivity technologies.

In terms of vertical mergers and acquisitions, 451 Research cites the transport and logistics segment as the most active with 11 business transactions. Given all the attention paid to remote healthcare monitoring, wireless hospitals, and more, it is not surprising that fitness and healthcare ranked a close second among the verticals with 10 deals. Five companies relating to the home automation segment also were purchased.

Clearly, major investments are being made in enabling the IoT, and those investments will continue to rise. They will inspire IoT-focused research and development across a myriad of categories including communications infrastructure and networking. For the microwave and RF industry, this should certainly translate into a major growth period while the IoT ramps up. Once it’s in place, the industry can look forward to having a key role in maintaining and upgrading communications and other capabilities.